Every year, car depreciation costs Latvian drivers more than fuel or insurance – yet almost no one stops to count it. The moment you drive a new car out of the showroom, its value starts to fall, and over a few years thousands of euros can simply evaporate. The good news is that this mistake can be avoided once you understand how depreciation works and what alternatives to buying are out there.
Car depreciation is the decline in a car’s market value over time – the difference between what you paid when you bought it and what you get back when you sell it.
In short
- A new car loses around 20–30% of its value in the first year.
- Over the first 3–5 years, most new cars lose roughly half of their original price.
- A car worth €30,000 can “evaporate” by €12,000–15,000 in five years.
- The depreciation risk can be passed on to someone else entirely – for example, by choosing a subscription instead of buying.
How much does a new car depreciate per year?
According to European residual-value monitoring companies Autovista and Eurotax, the first owner shoulders the heaviest depreciation burden – a vehicle’s value drops fastest during its first years on the road, and after the fourth or fifth year the process slows considerably. According to European car-value monitors, most cars lose around 40–55% of their original value within the first three years.
After that, the curve flattens out. Beyond the fourth or fifth year the value falls much more gently, so the same car bought at three years old depreciates far less than a brand-new one. It is precisely because of this curve that the first owner takes on the hardest financial hit – and the second owner reaps the benefit.
Why is depreciation a car’s single biggest cost?
For many drivers, depreciation costs more than fuel, insurance and servicing combined – but the expense stays invisible until it is time to sell. Unlike a full tank of fuel, the loss of value never appears on a single monthly receipt, which makes it easy to ignore.
Let’s put real numbers on it. Say you buy a new €30,000 car and drive it for five years:
- Fuel: ~€1,500/year → about €7,500
- Insurance: ~€600/year → about €3,000
- Servicing and tyres: ~€500/year → about €2,500
- Total running costs over 5 years: ~€13,000
Now the depreciation: after five years that same car will be worth roughly €15,000. That means depreciation alone cost around €15,000 – more than all the fuel, insurance and servicing bills put together. This is exactly why it is the most expensive yet least noticed mistake: you are paying for value you will never get back.
There is a way to stop paying for depreciation altogether. With a MyBee subscription you pay only for using the car – not for an asset that keeps losing value.
See how the subscription works →
Which cars hold their value best in Latvia?
In Latvia, value is best retained by in-demand, economical and reliable models that the used market is constantly looking for. A practical family crossover or a popular estate with genuine resale demand will be worth more after a few years than a rare or luxury model.
A few local-market nuances worth knowing before you buy:
- Fuel type matters. Diesels held their value well in Latvia for a long time, but tightening urban emission zones and shifting demand are gradually changing that rule.
- EVs depreciate faster. Rapidly improving battery technology and frequent model updates mean an older-generation EV loses value faster than a comparable combustion car.
- The premium segment falls the hardest. Even when the percentage is similar, the absolute sum lost on an expensive badge is far greater
What factors determine a car’s depreciation?
How fast a car depreciates is not driven by age alone. Two cars built on the same day can be worth completely different amounts after three years, depending on a few key factors:
- Mileage – the more it has been driven, the lower the value.
- Make and model demand – popular models fall in value more slowly.
- Condition and history – accidents, service history, bodywork condition.
- Trim and colour – neutral colours and sought-after equipment help retain value.
- A new generation arriving – when an updated model is released, the older one drops in value immediately.
- Market trends – fuel prices, taxes, technology shifts.
How to avoid or reduce car depreciation
You cannot avoid depreciation entirely if you own the car, but you can dramatically reduce the loss – or pass the risk on to someone else. Here are the main ways:
- Buy a 2–3 year-old used car, not a new one. The first owner has already absorbed the worst of the depreciation.
- Choose value-retaining models. An in-demand, reliable car loses value more slowly.
- Don’t over-buy. Don’t pay for a class, engine or equipment you don’t actually need.
- Don’t finance a depreciating asset. An expensive lease or loan only adds interest on top of an already-depreciating car.
- Weigh up alternatives to buying – long-term rental or a subscription, where the depreciation risk is no longer yours at all.
If you still want a new car
Then at least choose a value-retaining model, a neutral colour, and skip the extra equipment that the used market won’t reward. Be prepared to take the biggest hit to value during the first year.
If you are considering leasing
Leasing does not eliminate depreciation – you are still the owner, so the full risk of losing value stays with you. When the contract ends, you often still have to decide what to do with a depreciating car.
If you need a car only temporarily
When you need a car for a specific period or for changing needs, a subscription lets you use one with no depreciation risk at all, and return it whenever you like.
Buying, leasing or subscribing – where does the depreciation risk land?
The fundamental difference between the options is who takes on the depreciation. When you buy or lease, the risk stays with you; with a subscription, the provider takes it on.
| Buying new | Buying used | Leasing | Subscription (MyBee) | |
| Depreciation risk | All yours (the largest) | Lower, but still yours | All yours | Taken on by MyBee |
| Upfront payment | Full price | Full price | Often 10–20% | None |
| What’s included | Nothing | Nothing | Usually nothing | Insurance, servicing, tyres, 24/7 assistance |
| Flexibility | Low | Low | Low (long contract) | High (return it when you no longer need it) |
With a subscription, the depreciation risk simply disappears. You choose a model, you drive, and MyBee – not you – takes care of the loss in value.
Browse the most popular models →
How does a subscription remove depreciation risk?
A subscription removes depreciation risk because you never become the owner of the car – you pay only for using it, while the asset that loses value stays with MyBee. When you no longer need it, you simply return the car, with no need to work out who to sell it to or for how much.
The MyBee subscription works on an “all-inclusive” principle: one fixed monthly payment covers insurance, servicing, tyre changes and 24/7 roadside assistance. There is no upfront payment, and it is more flexible than leasing – with no long-term commitment that turns a car into a burden. Instead of thousands of euros quietly evaporating into a car’s value, you pay a predictable amount for actual use.
Stop paying for car depreciation. Choose a subscription where this risk is no longer yours – with no upfront payment and everything included.
Frequently asked questions
How much does a new car depreciate in the first year?
A new car loses around 20–30% of its value in the first year. The biggest drop happens the moment it is registered, when the car officially becomes “used.”
Which car depreciates the least?
The slowest to lose value are in-demand, reliable and economical models that the used market is always looking for. Rare, luxury or fast-ageing-technology cars lose value more quickly.
Is it worth buying a new car?
If minimising losses is your top priority, a new car is often not the optimal choice, because it absorbs the largest share of depreciation. A 2–3 year-old used car or a subscription lets you avoid this mistake.
Does leasing protect against depreciation?
No. With a lease you remain the car’s owner, so the full depreciation risk is yours, and when the contract ends you still have to decide what to do with a depreciating car.
Is a subscription cheaper than buying?
A monthly subscription payment can be similar to a loan or lease instalment, but it covers insurance, servicing, tyres and 24/7 assistance – and, crucially, it removes depreciation risk and unexpected repair costs. Once you factor in the full cost of ownership, it pays off for many people.
How can I find out how much my car has already depreciated?
Compare the price you paid with current market prices for similar cars of the same model, year and mileage. That difference is your depreciation.
The bottom line
Depreciation is the quiet but most expensive part of owning a car – and the only one you can almost completely eliminate through a single choice. If you want to drive a new car without losing thousands of euros in value, a subscription lets you pay only for what you actually use.